Nuclear power reduction would 'damage' Japan economy

Reducing nuclear output to zero after the Fukushima disaster would cause major damage to Japan's economy.

Just 19 out of Japan's 54 reactors are still functioning after the crisis at the Fukushima Daiichi plant due to plants being shut down for routine maintenance and closer inspection.

"I am fairly convinced that those operating plants can continue operation and those that are shut down for inspection can be resumed," Banri Kaieda said at a Vienna conference on boosting global nuclear safety.

If nuclear power was to be reduced to zero "that could have a major adverse impact on the Japanese industries as well as on Japan's economy".

"Should there be a sudden brake applied on the Japanese economy that could have a very big impact upon the global economy as a whole," he said.

Companies and authorities are working to rebuild manufacturing capacity and infrastructure in the region as a way to restore the global supply chain disrupted by the earthquake and tsunami.

"It is not fully recovered 100 per cent in some of the industrial sectors, but having said that the chains in the supply chain are now linked to each other," Kaieda said.

"This has been been taking place faster than had originally been anticipated so you can see that Japanese industries, in particular manufacturing, will be able to recover and reconstruct from the second half of this year."

It is crucial to find enough funding to rebuild infrastructure in the region hit by a big earthquake and tsunami despite fiscal constraints on the Japanese government, he added.

Even after reconstruction, Japanese industry has to cope with a strong yen and high commodity prices, he said, and noted that Japan had been able to respond to such shocks in the past.

"I am confident that we will be able to do so and come out stronger like a phoenix from this devastating situation," he said.